# Shared Flashcard Set

## Details

A324 Quiz 1 Equations
Equations from the book
23
Accounting
11/03/2014

Term
 Operating Income
Definition
 Revenues - COGS - Period Costs (EBIT)
Term
 Prime Costs
Definition
 Direct materials costs + Direct manufacturing labor costs
Term
 Conversion Costs
Definition
 Direct manufacturing labor costs + Manufacturing overhead costs
Term
 Contribution Margin
Definition
 Revenues – Variable Costs
Term
 Contribution Margin per unit
Definition
 Selling price - Variable cost per unit
Term
 Contribution Margin Percentage
Definition
 Contribution margin per unit / Selling Price
Term
 Breakeven Number of Units
Definition
 Fixed costs / Contribution margin per unit
Term
 Breakeven Revenues
Definition
 Fixed costs / Contribution margin %
Term
 Quantity of Units Required to be sold
Definition
 (Fixed costs + Target operating income) / (Contribution margin per unit)
Term
 Net Income
Definition
 Operating income - Income taxes
Term
 Target Net Income
Definition
 (Target operating income) * (1 - Tax rate)
Term
 Target Operating Income
Definition
 Target net income / (1 - Tax rate)
Term
 Margin of Safety (revenues)
Definition
 Target sales - Breakeven Sales
Term
 Margin of Safety (units)
Definition
 Budgeted (or actual) sales quantity - Breakeven quantity
Term
 Margin of Safety Percentage
Definition
 Margin of safety in dollars / Budgeted (or actual) revenues
Term
 Degree of Operating Leverage
Definition
 Contribution margin / Operating income
Term
 Breakeven point in bundles
Definition
 Fixed costs / Contribution margin per bundle
Term
 Contribution margin of the bundle
Definition
 Contribution margin of the bundle / Revenue of the bundle
Term
Definition
 Budgeted Manufacturing Overhead Costs / Budgeted Total Quantity of Cost-Allocation Base
Term
 Budgeted-Indirect cost rate
Definition
 Budgeted annual indirect cost/(divided by) budgeted annual quantity of the cost allocation base
Term
 Equivalent Units
Definition
 Costs of inputs ÷ quantity of output
Term
 Price Variance
Definition
 (Actual price of input - Budgeted price of input) x Actual Quantity of output
Term
 Efficiency Variance
Definition
 (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Budgeted price of input
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